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The following exchange rates have been obtained from the official website of Westpac Banking Corporation ( All Rates are in term of foreign currency units

The following exchange rates have been obtained from the official website of Westpac Banking Corporation (All Rates are in term of foreign currency units to one unit of Australian dollar).

Country name

Code

April 1, 2019

March 31, 2020

BD

ASK

Mid

BID

ASK

MID

USA

USD

0.7483

0.6745

0.7114

0.6481

0.5859

0.6170

United Kingdom

GBP

0.5720

0.5189

0.5455

0.5235

0.4763

0.4999

South Africa

ZAR

10.6382

9.6607

10.1495

11.6012

10.4912

11.0462

Norway

NOK

6.3986

5.8055

6.10205

6.8145

6.1629

6.4887

Fiji

FJD

1.6064

1.4192

1.5128

1.5022

1.3483

1.4253

Japan

JPY

82.8200

74.8800

78.8500

70.0800

63.5500

66.8150

Sources:https://www.westpac.com.au/personal-banking/services/historical-rates/

Required:

  1. Differentiate the manage foreign exchange rate system from a floating rate system.(Points 03)
  2. Has AUD depreciated/appreciated against GBP and NOK? Use the middle exchange rates to estimate the foreign exchange rate change during the year ended as at 31stMarch 2020.(Points 03)
  3. Explain how the recorded exchange rate changes in GBP and NOK during the year ended 31stMarch 2020 in could affect to the Australian balance of payments between two countries in the coming year.(Points 04)
  4. List four factors which can affect the bid and ask spreads in different currencies.(Points 02)
  5. Estimate the bid and ask spreads for USD and JPY at 31stMarch 2020.(Points 01)
  6. Estimate the conversion value of the following transactions using the exchange rates as at 31stMarch 2020.(Points 02)
  • USD100,000 advance payment to be made for a supplier in New York
  • FJD value of AUD2,525.00 you expect to use for your forthcoming travel to in Fuji Islands.

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